Saving Your Lien – the “Triple Step” Dance

Saving Your Lien – the “Triple Step” Dance

| Jan 13, 2021 | Construction Law |

Sure, you know that if you’re a subcontractor you need to provide an NTO to the owner within 45 days of starting, and you know that you must record your lien within 90 days of substantial completion, but as a contractor do you know about the final step in the lien dance?  The Contractor’s Final Payment Affidavit.

According to s.713.06(3)(d), Florida Statutes:

The contractor shall have no lien or right of action against the owner for labor, services, or materials furnished under the direct contract while in default for not giving the owner the affidavit; however, the negligent inclusion or omission of any information in the affidavit which has not prejudiced the owner does not constitute a default that operates to defeat an otherwise valid lien. The contractor shall execute the affidavit and deliver it to the owner at least 5 days before instituting an action as a prerequisite to the institution of any action to enforce his or her lien under this chapter, even if the final payment has not become due because the contract is terminated for a reason other than completion and regardless of whether the contractor has any lienors working under him or her or not.

This statutory language establishes that timely delivery of a final payment affidavit is a condition precedent to a lawsuit seeking to foreclose on a construction lien. See Holding Elec., Inc. v. Roberts, 530 So.2d 301, 303 (Fla. 1988).   Where a contractor fails to timely furnish a final payment affidavit, the owner is generally entitled to dismissal of the contractor’s foreclosure suit. See Privas v. Brisson Custom Homes, Inc., 817 So.2d 983, 984.

Moreover, it’s possible that your lien foreclosure complaint could be dismissed with prejudice.  As we know, it is sometimes the case that the Complaint is filed at the the 11th hours – just before the 1-year statute of limitations expires.  The timing could be such that it impossible to serve the required affidavit 5 days before timely filing a lawsuit.   This scenario is addressed in Privas, supra.  To have perfected its lien, the contractor was required to serve his affidavit on the homeowner five days prior to filing his complaint. The complaint had to be filed within one year of the original filing date of the claim of lien. In this case, the claim of lien was filed on July 6, 1995. The affidavit therefore had to be delivered five days prior to filing an amended complaint before July 6, 1996. While the contractor filed its original complaint on May 13, 1996, within the one-year statute of limitations period, no affidavit had been delivered to the homeowner.   By the time the contractor filed its amended complaint on September 6, 1996, the one-year statutory time period had elapsed. By failing to timely comply with the statutory prerequisite of delivering the affidavit to the homeowner five days prior to filing a complaint within the one-year statutory time frame, the contractor is now “foreclosed” from foreclosing on its claim of lien.

So now you know – the lien foreclosure process is not the “two-step.”